Labrador Inuit put hold on uranium mining and production on their lands
6 hours ago
HALIFAX — Labrador's Inuit government is imposing a moratorium onuranium mining and production on their land for the next three years,in a decision that drove down the shares of Aurora Energy Resources(TSX:AXU) and several other mining companies.
The 8-7 vote infavour of the moratorium doesn't apply to exploration for theradioactive metal, but prohibits mining or milling until the Nunsiavutgovernment develops its own environmental laws by 2011.
Thedecision had mining analysts wondering whether the schedule will changefor Aurora's proposed mine, which is located in Inuit territory about40 kilometres from Postville on Labrador's northern shore.
Auroralost one-third of its value Tuesday in the heaviest trading since itwent public two years ago. Its stock fell $1.77 to $3.50, with morethan 3.3 million exchanged at the Toronto Stock Exchange, erasingnearly $130 million in market value.
"It hurts their shares, ithurts their ability to raise money," said Patrick Donnelly, an analystwith Salman Partners. "We don't know if it will affect their startupdate of 2013."
Donnelly also noted that a number of other smallcompanies, such as Bayswater Uranium Mining (TSXV:BAY) and SilverSpruce (TSXV:SSE), saw small drops in their stock prices after thedecision.
He said another proposed project by CrosshairExploration and Mining (TSXV:CXX) isn't on Inuit land, but nonethelessits stock fell 11 cents to 75 cents on Tuesday.
Mark O'Dea, thechief executive of Aurora, said it's too early to conclude if scheduleswill be impacted, but he predicted that there will be some job lossesand some decline in exploration activity in Labrador.
"There'sgoing to be some economic repercussions based on the unfortunate choice... of the word moratorium," he said in an interview. "I think it'sgoing to have an impact on how people perceive Nunsiavut and whetherit's open for business or not."
He said his company will finishup some engineering studies on its proposed open pit and undergroundmines in Michelin and Jacques Lakes deposits.
However, he predicts 20 to 25 job losses in exploration as the company scales back over the next few years.
O'Dea said his company has $120 million in cash, adding, "we have enough capital to get us through this bump in the road."
WilliamBarbour, the Nunasiavut lands and resources minister, said the decisionwas taken to ensure Inuit have a say in the long-term protection of theenvironment on their ancient lands.
He said many members of theInuit community expressed concerns about the negative environmental andpublic health effects associated with uranium mining.
"It givesthe Nunatsiavut government the badly needed time to work at things thatour government is required to do, including a land-use plan andpreparing an environmental assessment act," Barbour said.
Thecompany had argued that the Inuit could have developed this legislationand expertise while a federal-provincial environmental review wascarried out.
However, Barbour said that the Inuit government - created in 2005 - needs to have a direct say.
Hesaid he envisions having a process where the three governmentsparticipate together, with the Inuit having a direct say in the process.
"We want to have our own Act to deal with our own land," he said.
Thegovernment news release notes that the Inuit remain concerned about theenvironmental impact of uranium mining, which produces tailings withlow-level emissions of radiation.
"Inuit are concerned about thenegative environmental and public health effects associated withuranium mining," says a news release .